Auto manufacturers began FY ’22 with expectations of month-on-month sequential recovery. But their hopes were dashed by the catastrophic second wave of the pandemic and the phased lockdowns from mid-April till the better part of May.
Thus, June can be seen as the first month of this fiscal to have sustained plant operations in many areas of the country, compensating for the volumes lost in April and May.
Auto makers have recovered significant ground as the dispatches have normalised with the entire production process back to previous levels.
Passenger vehicles
Maruti Suzuki recorded the highest gain in market share of 16.8% in Jun ’21 compared to May ’21. Maruti’s domestic volumes shot 277% in Jun ’21 when compared to May ’21.”Sales in Q1 of both FY ’21 and FY ’22 have been far from normal owing to the Covid-related lockdowns and disruptions and hence any comparison would not be meaningful,” MSIL said in a regulatory filing.
Hyundai India sales increased 89% y-o-y and 62% m-o-m. Due to Maruti’s resurgence, Hyundai’s market share dropped to 15.9% in Jun ’21 against 24.2% in May ’21.
Tata Motors continues to perform well and its volumes more than doubled in Jun ’21 against Jun ’20. It is now averaging around 25,000 units and plans to increase this to 30,000 with the launch of the HBX mini-SUV.
Mahindra & Mahindra regained its fourth rank with and sales increasing by over 109% y-o-y and 114% m-o-m.
Two-wheelers
In the two-wheeler segment, market leader Hero MotoCorp sold more than 4 lakh units in the domestic market. “During this quarter, the auto industry witnessed significant disruptions triggered by the second wave of the coronavirus pandemic, restricting movement of logistics and dampening customer sentiments,” the company said in a statement.
“Heading into the upcoming festive season, the company remains cautiously optimistic about customer demand in the coming months. The expected surge in personal mobility, forecast of a normal monsoon in several parts of the country and the improving rural sentiment are expected to lead to a swift revival in sales,” the company further said.
Rival Honda Motorcycle and Scooter India (HMSI)sold more than 2.12 lakh vehicles in the domestic market. “Almost 95% of HMSI dealers have resumed business while we are gradually scaling up operations across all four plants,” said Yadvinder Singh Guleria, director, sales and marketing, HMSI. “Overall, the two-wheeler sales performance in Jun ’21 has boosted market sentiment as more customers are visiting dealerships and enquiring online,” he added.
Tractors
Mahindra & Mahindra sold 46,875 units in Jun ’21 to register a 31% growth y-o-y.
Escorts said that the on-ground situation eased in June as the second wave of the pandemic started diluting. “Our inventory levels, both with the company and with the channel, continue to be at normal levels. We remain optimistic for the rest of the fiscal year, as timely and expected above-normal monsoon, increase in the minimum support prices, and record direct procurement by the government are leading to a positive build-up of farmer sentiments,” the company said.It sold 11,956 units in Jun ’21, clocking a growth of 12.5% y-o-y.
Outlook
Going forward, most of the OEMs are increasing prices due to the spike in input costs. Global semiconductor shortage, rising costs of steel, fear of the Covid third wave, sharp increase in fuel prices and the rise in ownership cost are also being seen as some of the challenges that auto majors face.
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